Rev. Rul. 56-411

A department store leases the operation of one of its departments to another party, who sells at retail in that department articles subject to the retailers excise taxes. Title to the articles held for sale is vested in the lessee, and the salespeople who work in his department are employed and paid by him. All sales transactions, however, are handled through the office of the department store. At the end of each month, the department store furnishes the lessee a record of the transactions relating to his department for that month. Held, since the lessee is the person who has title to the articles sold in his department, he is considered to be the person who sells such articles at retail and, therefore, is liable for the retailers excise tax on the sale of any taxable article. Under the provisions of section 6011(a) of the Internal Revenue Code of 1954, he is the person who must make a return and pay the taxes to the Government.